Jim O’Connor Issues Challenge to Bellone: Avoid Using Fiscal Gimmicks in Budget Due This Week

Tuesday, September 15, 2015

Jim O’Connor, Republican-Conservative candidate for Suffolk County Executive, discusses the fiscal gimmicks County Executive Steve Bellone used to plug the deficit hole in his budget during a press conference on September 15.

As Suffolk County Executive Steve Bellone prepares to submit his 2016 operating budget on Friday, September 18, Jim O’Connor, the Republican-Conservative nominee for Suffolk County Executive, held a press conference on September 15 showing the fiscal gimmickry used by the current County Executive, Steve Bellone, which, Mr. O’Connor said, resulted in huge deficits in the budget. Mr. O’Connor also said that Mr. Bellone’s penchant for borrowing has not only earned the county executive the nickname “Bellone the Borrower” but placed unnecessary tax burdens on future generations of Suffolk taxpayers.

“There is a reason my campaign has dubbed the County Executive ‘Bellone the Borrower,’” Mr. O’Connor said. “He has refused to address the county’s spending problems head-on and instead has taken the politically easier path of floating bonds and backloading or deferring fiscal obligations in a way that gives new meaning to the term ‘kicking the can down the road.’”

He also pointed out that Mr. Bellone overestimated an increase in sales tax collections; he said there would be a revenue increase of 4.87%, when, in actuality, the County Legislature’s Budget Review Office showed it was an increase of only 0.65%. This means he overestimated by 650%.

Suffolk County currently has a recurring structural deficit of $176 million. Legislative budget analysts are concerned that his most recent overestimation will increase the deficit by another $71 million, meaning Suffolk’s expenditures would outpace its revenues by $247 million — that is nearly a quarter of a billion dollars. Mr. O’Connor cited a report from New York State Comptroller Thomas DiNapoli — who, like Bellone, is a Democrat — that showed Suffolk as one of the most fiscally stressed counties in the state.

Mr. O’Connor blasted Mr. Bellone for bonding salaries rather than allocating the money in the county’s operating budget. “This is the cardinal sin of budgeting,” Mr. O’Connor said. “Floating bonds to pay for operating salaries is the equivalent of taking out a mortgage to buy your household groceries. It’s what got New York City into its financial nightmares in the 1970s.”

Last year, Mr. Bellone borrowed an astounding $87 million from the pension fund because he had no money to pay for the employee pension costs. In total, over the past three years, he has borrowed over $200 million to defer his pension payments. “Had Bellone paid his pension obligations as Nassau did last year (they did not borrow or defer for their repayment), he would have had to double the general fund property tax levy for every taxpayer in Suffolk,” Mr. O’Connor said. “Remember: this is the same Steve Bellone who says he’s held the line on taxes. This begs the question: how much more will he borrow next year?”

Lastly, Mr. O’Connor blasted Mr. Bellone for his giveaway to the police unions in the form of a contract in excess of $400 million; under this sweetheart deal, a typical Suffolk County detective will earn $227,000 annually by the year 2018. Whereas the county’s general fund taxes are approximately $50 million, the taxes needed to float Suffolk’s police budget is 10 times that — $500 million, or half a billion dollars. “The extraordinarily high police salaries are one of the prime reasons why county taxes are so high,” Mr. O’Connor said. “Steve Bellone just put police salaries into the stratosphere.”

Another mistake Bellone made, Mr. O’Connor stated, was selling the H. Lee Dennison Building — which the county owned outright — and leasing it back. Worse, Mr. Bellone overinflated the sale price at $70 million, when the actual price was appraised at $23 million. “No wonder we are facing a $176 million shortfall for the upcoming year,” he said. “Remember, whether it was $75 million or $25 million, Bellone planned to use all that money in a single year to tape over his structural deficit and give the impression that he was balancing the budget.”

Mr. O’Connor said the excessive borrowing, bonding of salaries and pensions and overestimation of sales tax revenue has resulted in the county’s poor financial performance. “Suffolk’s dirty little secret is that, while all the attention has been focused on Nassau County’s fiscal calamities, Bellone has taken Suffolk to the point where its finances are actually worse,” he said, “and Nassau has a Fiscal Control Board.”